Tuesday, May 09, 2006
Our Economy Depends On Consumption Even As Debt Destroys The Consumer
The ferocious American economy feeds on consumption. Without it, the wealth factories will close down. The problem is that, as prices go up and corporate profits explode, the spending power of the consumer continues to stagnate. As a consequence, the consumer spends more than he earns and is, on average, deeply in debt. Corporations need to think of their employees not simply as expenses to cut, but as consumers to cultivate. Even if the superlatively brutal star system of the American economy devalues the contribution of the individual worker as a worker, it must acknowledge his value as a consumer. For, without the consumer, there are no sales, without sales there is no revenue, and without revenue there can be no profit no matter how ruthlessly wages are suppressed. It is only by understanding the dual nature of those whom they dismiss simply as "human overhead", and by fertilizing the "consumer farm" of the American public, can corporate leaders continue to reap the fruits of their own greed. See the excellent article below for more details on how rampantly escalating consumer debt is laying waste to the American economy.
"The Household Debt Bubble" from Monthly Review